ISLAMABAD: The Senate Committee on Petroleum was informed on Tuesday that the circular debt in the gas sector has surged by Rs1,700 billion over the past decade, now totaling Rs2,897 billion.
During a meeting chaired by Senator Umar Farooq at the Parliament House, petroleum officials attributed the debt escalation to the failure to increase gas tariffs from 2013 to 2023. They noted that the debt’s growth has halted following a triple hike in gas prices. The committee was informed of an annual Rs800 billion gap between the official purchase and sale price of gas.
The Ministry of Petroleum officials highlighted that three major companies, OGDCL, PSO, and Pakistan Petroleum Limited, owe Rs2,752 billion, accounting for 95% of the total circular debt. OGDCL’s share is Rs1,133 billion, PSO’s is Rs816 billion, and Pakistan Petroleum Limited’s share is Rs803 billion.
The committee was also briefed on the depletion of indigenous gas reserves by 10% annually. The committee recommended submitting detailed gas consumption data by provinces in the next meeting.
Deliberations also covered “The Pakistan Minerals Regulatory Authority Bill, 2024,” aimed at improving coordination between the federal and provincial governments to fully utilize the country’s mineral potential. Senator Mohammad Abdul Qadir emphasized the need for cohesion to transform the minerals sector into a value-added commodity for the national economy. The Secretary of Petroleum noted that the “Harmonization of Minerals Laws” with provinces is underway, with an implementation plan expected by September 2024.
The DG Gas reported that the country’s daily gas and oil consumption is approximately 3,200 MMCFT and 7,000 million barrels, respectively. Sindh holds the highest gas share at 64%, while Khyber Pakhtunkhwa has a 42% share in oil production.
Secretary Petroleum Division Momin Agha detailed that of the 3,200 MMCFT of gas, 200 MMCFT is used for production, 1,400 MMCFT by fertilizer and power companies, and 1,600 MMCFT for domestic purposes. The ministry has mandated oil and gas companies to allocate a minimum of $30,000 for social welfare projects, primarily in clean water, education, and healthcare.
Senator Umar Farooq directed the presentation of details on social work done by oil and gas companies under Corporate Social Responsibility over the past three years. Additionally, the committee was briefed by the MDs of Sui Southern Gas (SSGPL) and Sui Northern Gas (SNGPL) on their operations and performance.
The Secretary of the Petroleum Division informed that thirteen companies fall under the ministry’s ambit, with the ministry facilitating collaboration to meet the country’s oil and gas demand. The Senate Committee on Petroleum raised objections over the failure to appoint an MD for OGDCL and requested details on vacant MD and Board of Directors positions. An exclusive briefing on Reko Diq is scheduled for the next meeting.
